Obamaconics

[toasty]

Question for those of you finanical/economic gurus -- first, check out this opinion piece from the WSJ regarding Obama's economic plan:

http://online.wsj.com/article/SB121815226803922393.html

The article notes:

Reuters also quoted Mr. Obama as saying "The way to strengthen the dollar is for us to get our economy back in shape." On that point, he has it backward: Strengthening the dollar would help the economy...

Question is this, and it's a serious question. How do you improve the value of the dollar without improving the economy first? Seems like a chicken and egg thing to some extent, but what sort of force can we exert on the dollar apart from improving our own economy?

Edit: Hit post and immediately realized that I totally fucked up the title. Oh well, my bad...

[thesightless]

Re: Obamaconics

there is a lot of chicken/egg theory.

but the WSJ has a point.

if we strengthen the dopllar, it will have an inverse relationship in reagrds to price adjustments on virtually all commodeties. most of them are traded in US dollars. by raising the value of the dollar, you begin to posess the ability to buy widget A at a lower price in regard to a weaker currency. by doing this, we funnel more value into the domestic economy as opposed to foreign markets.

however, this also hurts us in the debt we carry, as the debt is in dollars, and the higher value of the currency means we are paying a higher vlaue on our debt.

there is obviously a lot more to this and i should read the article this afternoon.

[MJDub]

Re: Obamaconics

Now mind you, I'm a giant economics noob, but I think a valid question is what events/processes need to happen for the dollar to regain strength? No doubt a stronger dollar helps strengthen the economy, but aside from having a stronger economy, how would the dollar become stronger?

Both Obama and the WSJ seem to have valid points here, but they also both seem to be catch 22's.

[thesightless]

Re: Obamaconics

there really isnt a true answer. you could have buffet debate soros for a year and not come up with one definitive answer.

plus, market action nowadays has as much to do with the media as it does with balance sheets.

[88Mariner]

Re: Obamaconics

how do you make the dollar worth more? Simple. raid the Fed Reserve offices and the printing presses. throw them in jail for a while.

[MJDub]

Re: Obamaconics

^ That's probably a damn good plan. Isn't that why the British pound is worth so much (just because there's fewer of them in circulation)? We should trend more toward the Brits' approach to currency rather than the Zimbabweans. I'm sure that's a solid first step.

[picklemonkey]

Re: Obamaconics

http://www.youtube.com/watch?v=65I0HNvTDH4

[neoee]

Re: Obamaconics

I say 88Mariner's got the right idea- stop printing up more dollars. Probably not a bad idea to stop backing the dollar with oil (OPEC). Also stop borrowing money from other countries to fund wars. Of course I'm no economics expert.

BTW I just saw a documentary called Maxed Out. Its more about personal credit but it does touch on some of the scary aspects of our national debts. Worth checking out.

[thesightless]

Re: Obamaconics

guys, they dont just print money. its all based on certain commoditites and debts we hold. the base quantity of currency changes by the day, and fluxes into the multi millions of dollars taken in and given out by the fed depository branches. on any given day, they can pull millions out of circulation and the next day insert it right back in. its based on a large formula of where our currency stands as opposed to the World Bank averages.

[Jenks]

Re: Obamaconics

The Fed stopped reporting how much money they print and put into circulation a few years ago, which is criminal.